Seattle's cafe habitue foam over initiative on `latte tax'

September 15, 2003|By Jessica Kowal, Special to the Tribune.

SEATTLE — Step into a coffee shop here and you'll be assaulted by the argot of espresso.

This is the land of the double-short non-fat vanilla cappuccino, the single grande toasted-marshmallow latte and the triple tall soy Irish cream mocha. They're concocted by the baristas who work for the coffee behemoth, Starbucks, but also in hundreds of small coffee shops, drive-through cafes, corner delis and even gas stations. The pricey drinks made of espresso and foamy milk are the lifeblood of Seattle's social life.

In Tuesday's primary election, voters will decide whether they want to tax their lifeblood for the sake of children. A proposed 10 cent per cup tax for espresso drinks, dubbed the "latte tax," would collect an estimated $7 million annually to expand pre-kindergarten programs for low-income children and subsidize wages of certain child-care workers.

Organizers of Initiative 77 describe the initiative as "10 cents for kids." They contend it's the best way to raise money for a cherished cause by taxing a luxurious purchase. Regular drip coffee would remain untaxed.

Seattle-area voters have proved receptive to taxing themselves for new services. During the boom 1990s, they agreed to pay for new parks, libraries, community centers and an opera house, and last year approved a new tax to build a monorail transit system.

The last drop

But the latte tax might be going a step too far, infuriating many generally liberal people. They want the government out of their coffee cups. Taxing espresso, they say, is akin to charging an extra fee for deep-dish pizza in Chicago, potatoes in Idaho or T-bone steaks in Texas.

"I definitely think child-care education needs more money. I don't necessarily think taxing espresso is the way to do it," said Megan Newman, 22, a history student and part-time nanny, who frequents Coffee Messiah, a cafe decorated with paintings of Jesus and neon signs announcing the shop's motto, "Caffeine Saves."

A latte isn't a luxury, she said, "because I'm poor and I still buy it."

The proposed tax has been made fun of, but John Burbank, who floated the idea, takes it seriously. It's an ideal product for an extra tax, he said, because its popularity guarantees a steady stream of funding.

Another advantage is that people consume their coffee drinks immediately. So while there's a temptation to cross a county or state line to avoid sin taxes on cigarettes or alcohol, Seattle's 560,000 residents, 100,000 suburban commuters and millions of tourists won't leave town to buy a tax-free cappuccino, he said.

"Let's be frank: This is an out-of-the-box idea, and people ridicule something that hasn't been tried before," said Burbank, executive director of the Economic Opportunity Institute, a local public policy organization.

The institute has spent at least $51,000 to promote Initiative 77; others who support the tax include some parent-teacher groups, school nurses, education unions and the state's 2000 Mother of the Year.

Washington state has no income tax and the legislature sets the sales tax. Burbank decided that taxing discretionary coffee drinks was fairer than adding to a voter-approved property tax.

The tax would not apply to businesses with total revenue of less than $50,000 per year -- a shop selling just $150 per day in coffee and other products would be over that limit.

Opponents say they, too, support education. But they deride the idea of taxing a single product to pay for a wholly unrelated service. The plan is not the same as using cigarette taxes to pay for health care, they say.

To defeat the referendum, they launched a campaign called Joined in Opposition to the Latte Tax. JOLT has received $50,000 from Starbucks, which launched its global empire from a downtown storefront. The city's chamber of commerce, the state restaurant association, Boeing Corp., major banking, health care, real estate and insurance companies, as well as dozens of small coffee shops, also are fighting the ballot initiative.

Uh, oh, coffee police

Coffee Messiah's owner, who calls himself Opus, envisions a dark day when the "latte squads" stake out coffee shops and paw through cash register receipts in search of taxable cappuccinos. Some of his customers pledge an espresso boycott, though it seems doubtful they could give up their daily dose.